The Central Board of Direct Taxes (CBDT) has notified the new Monetary Limits for reduction or waiver of interest by the income tax authorities.

New Monetary Limits For Waiver Of Interest By Income Tax Authority

The Principal Commissioner of Income Tax  or Commissioner of income tax is empowered to deal with the monetary Limits upto Rs. 50 Lakhs for reduction or waiver of interest.

The Chief Commissioner of Income Tax Central (CCIT)/ Directorate General of Income Tax Investigation (DGIT) is empowered to deal with the monetary Limits above Rs. 50 lakhs to Rs. 1.5 crore for reduction or waiver of interest.

The Principal Chief Commissioner of Income Tax Central (Pr. CCIT) is empowered to deal with the monetary Limits above Rs. 1.5 crore for reduction or waiver of interest.

Consequences Of Non-Payment Of Income Tax

Section 220(2) of the Income-tax Act deals with the consequences of non-payment

of income tax by a taxpayer. 

As per Section 220(2) of the Income Tax Act if a taxpayer fails to pay the amount specified in any notice of demand under section 156 she shall be liable to pay simple interest at the rate of 1% per month or part of the month for the period of delay in making the payment.

Power Of Income Tax Authorities To Reduce Or Waive Interest Amount

Section 220(2A) empowers the Principal Chief Commissioner (Pr.CCIT) or Chief Commissioner (CCIT or Principal Commissioner (Pr.CIT) or Commissioner (CIT) for reduction or waiver of the amount paid or payable under section 220(2) of the Act.

Conditions For Waiver Of Interest By Income Tax Authority

The powers of reduction or waiver of the interest paid or payable under section 220(2) of the Act in respect of any income-tax authority shall continue to be subject to satisfaction of all the conditions specified under section 220(2A) of the Act.

Firstly, the payment of the amount has caused or would cause genuine hardship to the assessee.

Secondly, default in the payment of the amount on which interest has been paid or was payable under the said subsection was due to circumstances beyond the control of the assessee.

Thirdly, the assessee has cooperated in any inquiry relating to the assessment or any proceeding for the recovery of any amount due from him.

Circular Details

Circular No. 15/2024

Date: 04/11/2024